• USD/CNY dipped to hit one month low on Monday as China's yuan was boosted by positive developments around trade relations between Beijing and Washington.
• Sentiment was also underpinned by the central bank persistently guiding the market higher by setting the official midpoint firmer than expected.
•U.S. and Chinese negotiators agreed Sunday on a trade deal outline for Trump and Xi to review during their upcoming South Korea summit.
• The trade deal would halt higher U.S. tariffs and Chinese rare earth export curbs, easing investor worries over rising trade tensions.
• Meanwhile, Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate at 7.0881 per dollar, its strongest since October 15, 2024.
• Immediate resistance is located at 7.122(SMA20), any close above will push the pair towards 7.128(Oct 22nd high).
• Support is seen at 7.107(Lower BB) and break below could take the pair towards 7.101(23.6%fib).
Recommendation: Good to sell around 7.110 with stop loss of 7.130 and target price of 7.100
